After the WTO: The Violent Enemy Within

The recent turmoil at Wai Hong Cleaning and Pest Control is not a government-outsourcing problem. Nor is it an example of exploitation or of outsourcing resulting in underpaid workers. The problem is exploitation by Hong Kong unions that seek to recreate the livelihood-and-economy-destroying laws that protect a culture of mediocrity and enrich union bureaucrats.

Andrew Work

Friday, October 21, 2005

The recent turmoil at Wai Hong Cleaning and Pest Control is not a government-outsourcing problem. Nor is it an example of exploitation or of outsourcing resulting in underpaid workers. The problem is exploitation by Hong Kong unions that seek to recreate the livelihood-and-economy-destroying laws that protect a culture of mediocrity and enrich union bureaucrats.

Here in Hong Kong, formerly quiet unions are now in the media daily claiming exploitation, and saying unionization is the only way to help workers. They know that Hong Kong’s legal-political landscape is changing, creating opportunities for them to use the courts and legislature to benefit their members. The false moralizing in this case, and their opposition to the World Trade Organization, recall the lyrics of a 1980s rock song: “Just as fat as a union bureaucrat.”

This warning call is that the formerly creeping, now leaping, socialism plaguing Hong Kong is, in part, driven by ascendant unions.

The call for equality and worker protection will be used to strangle the ability of small and large business owners to determine how their companies are run when it comes to firing and hiring.

It also reduces the choice of employees, who face highly regulated workplaces that are unable to hire them without union agreement.

This creates a culture of fear from union strong-arming and mediocrity. The situation became so bad in the United States that the notorious Teamsters were known for their racketeering, and motorists used to say never buy a union-made car assembled on a Friday – you were risking your life because of the low quality of union work.

Once employed, competent workers found themselves with lower pay, while less productive colleagues were on seniority-based, union-approved pay scales.

My brother worked for a North American airline on contract for seven years because the airline could not afford new employees at union-mandated benefits. Meanwhile, egregiously incompetent union members were promoted annually, regardless of how much equipment they damaged or how many times they clocked in late.

When my brother was finally brought on full-time, he lost a large chunk of pay to union fees that went to support political causes he disagreed with, as well as legal fees to protect those same incompetent employees who worked alongside him.

The WHCPC case is particularly grating, with its brutal union spin and media coverage. This incident has nothing to do with government outsourcing, no matter how it has been portrayed. Employees had the same recourse to the courts as private sector players and used them successfully. That the company’s customer was the government is irrelevant, except in the eyes of unions seeking to twist a situation to strengthen their public image.

Complaints that private sector employers contracted by government were “making their employees work long hours,” deserve little sympathy in Hong Kong, which has the longest working hours in the Western world.

If government employees were previously working short hours to do the same job, those of us paying taxes after working a 50-60 hour week should be very happy with outsourcing. Maybe we can keep some more of our hard- earned wages, obtained after sacrificing family and leisure time.

Media has reprinted union comments without questioning the basic premise behind them. Like Nike, our government can bow to public pressure to monitor its contractors in ways that other firms do not have to.

But if problems arise between the employer and an employee, no matter who the customer may be, it’s a matter for the courts.

If the chef at a restaurant is unhappy with his days off, should customers tell the restaurateur to set out his employment policy on the menu for their approval? Likewise, it is absurd to believe that the issue of outsourcing is related to achieving social or economic goals.

So what is outsourcing about? It is recognized that enormous cost savings can be realized by outsourcing many government procedures. Businesses have the flexibility in practices, structure – and, yes, hiring and firing – as the market demands that government, bound by its unions, does not.

This results in savings, better service and room for innovation. It means that Hong Kong’s hardworking taxpayers pay less for better and more responsive service.

The unions fear a move to outsourcing because it reduces membership and, with it, power. And that’s what this is about. For an example of craven cynicism, just look at the union leadership in the anti-WTO movement. It claim that global trade and the WTO ignore the plight of workers, and should be stopped. This is nonsense.

If the rich-world unions wanted to bring our higher working standards and pay to poor-world countries, they would advocate an open-door immigration policy, instead of trashing free trade. The chances of them taking a pro- immigration policy are zero, as their members wouldn’t stand for it.

The unions are using the WHCPC case to misrepresent the government’s outsourcing aims and impact.

Outsourcing is about efficient government that responds to the needs of the people and reduces the burden on them. This is something the unions have no interest in at all.

Andrew Work is the executive director of the The Lion Rock Institute, a free- market think-tank